China Data confirms permanent economic slowing.

For some time we have been forecasting that the slow-down currently occurring in China is a permanent historic re-setting of the economy to somewhat more normal by western standards levels of activity.  As far as I know, no one else is seeing this, but that is the nature of human beings, to rely too heavily on recency. Most see this as a temporary pandemic after-shock, but it is much more than that. 

This latest data run below clearly displays the entrenched nature of the economy moderating in all areas. Of particular concern for Australia, given a deteriorating relationship, is that original broad demand from China for raw materials will see significantly lower levels of growth. If any.

As is always the case with any capitalist economic system which is what China has pursued until recently, there is a cyclical nature that seems inescapable. For China, all of this has been on another quantum level as more than one fifth of the world's population began the long shift from largely agrarian to an industrial powerhouse and modern consumer society.

What I am declaring here, is that China's 20 odd year catch up to the west is now complete.

The economic system maturing there will now settle at vastly lower rates of growth. China will still grow strongly, but on a more modest and to some degree more sustainable trajectory.

The readjustments that will flow from this will be global in nature. Another major reason to be cautious about global growth over the next few years.

The outlook for Australian trade is without a doubt greatly diminished.

China slowing is permanent and bearish the Australian dolla

Dec 15 2021

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